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Corporate chiefs want overhaul of reforms

BS Bureaus in New Delhi

Global and domestic industry captains have advocated a major overhaul of the reforms programme, including removing the rigidities in the labour market, lowering taxes, improving infrastructure, liberalising foreign direct investment norms and pushing the divestment process as a precondition for India to achieve the targeted 8 per cent growth rate.

Speaking at the plenary session on the India Economic Summit, jointly organised by the World Economic Forum and the Confederation of Indian Industry, Infosys chief N R Narayana Murthy said: "Mr Prime Minister, it is time for you to be courageous, firm, decisive and take decisions as if there is no tomorrow."

He urged Prime Minister Atal Bihari Vajpayee to take on board ministers and bureaucrats "who are modern and not emotional" and who understand the process of globalisation. He also called for giving unfettered freedom to such government functionaries.

"India should embrace globalisation instead of resisting it. You cannot get prosperity from government intervention or protectionism," said Lord Charles Powell, chairman of Sagitta Asset Management, UK.

He said China had embraced globalisation more thoroughly than India had, adding that "the ban on FDI in retail is a purely political ploy".

Responding to Powell's remarks about India lagging in embracing globalisation, Bajaj Auto chairman Rahul Bajaj said, "Poor countries have suffered more from less globalisation than too much of it."

Referring to the increasing non-tariff barriers imposed by the developed countries, Bajaj said those countries seemed more afraid of globalisation than the developing world.

He called upon the Prime Minister and Finance Minister Jaswant Singh to take up the issue of access to the US and the European Union markets at the next World Trade Organisation ministerial meet in Mexico.

"The problems faced by the developing countries in the light of the market access, including non-tariff barriers like environmental safeguards as well as agricultural subsidies given by the EU and the US, need to be taken up by our leaders at the right forum," Bajaj said.

Outlining the factors needed for propelling industrial growth in India, the president and the chief executive officer, Moody's Corporation, John Rutherford Jr called for reducing exit barriers and reconsideration of demographic policy.

"In China, the reconsideration of the demographic policy has led to a major increase in savings," he said.

India's problem of the public sector deficit and the measures adopted for deficit financing were a key issue, as also the need for improving the productivity of the government sector as a whole, Rutherford said. Moody's was slated for a review of India's foreign currency rating for an upgrade, he added.

Lord Powell said a number of EU countries as well as the US were guilty of grossly subsidising their products. "The agricultural subsidy is a scandal," he said.

The industry captains, Indian and foreign, agreed on the need for competitiveness as the major challenge facing companies all over the world.

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